Taylor Wimpey warns of higher build costs amid weak economy
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Taylor Wimpey has flagged greater building cost pressures amid the disruption of the Autum Budget and subdued economic ouput. The Buckinghamshire-based housebuilder said suppliers were trying to determine the impacts of the October Budget, which included increases to National Insurance rates and the National Living Wage.
It claimed to be 'well placed' to achieve volume growth in 2025 thanks to its current order book, although this would depend on the trajectory of mortgage rates and their impact on affordability. The Bank of England made just two base rate reductions last year of 25 basis points each, taking the rate to 4.75 per cent, as inflation rebounded in the second half amid higher energy and fuel prices.
Mortgage rates are falling to more affordable levels, though the best rates remain above 4 per cent for the time being. This has stimulated a recovery in residential prices and transactions. Nonetheless, Taylor Wimpey ended 2024 with an order book of 7,312 homes worth nearly £2billion, compared to 6,999 properties valued at £1.77billion in December 2023.
Caution: Taylor Wimpey has warned of greater building cost pressures following the recent Budget and subdued economic conditions. Jennie Daly, its chief executive, said: 'We enter 2025 with a strong order book and land position, underpinned by a robust balance sheet and highly experienced teams, which positions us well to deliver volume growth.'.
